At its meeting of 15 December 2021, the Monetary Policy Committee (MPC) of the Bank of Mauritius unanimously decided to keep the Key Repo Rate unchanged at 1.85% per annum.
The MPC said it reached the decision after after weighing the risks to the growth and inflation outlook and considered that the current monetary policy stance is appropriate and supportive of economic recovery.
The committee found that credit growth to households and corporates has been accelerating in the third quarter of the year, while the solvency and liquidity positions of banks remain strong.
The Bank has revised its growth rate projection for 2021 to around 5.0%.
The Bank said it continues to manage excess rupee liquidity in line with its monetary policy stance. Short- term yields have reportedly remained within the interest rate corridor.
“FX interventions have been conducted on a regular basis to address undue exchange rate volatility and to ensure adequate supply of foreign exchange to the market,” it said.
Domestic inflation reportedly remained influenced by supply shocks stemming from outside, in particular higher freight costs, as well as higher food and other commodity prices.
“These supply-side influences are expected to subside in the medium term,” the BoM said.
In the absence of any further exogenous shocks, the Bank is projecting headline inflation at about 4.0% for 2021 which, it said, “remains within an acceptable range as per historical data.”
